On Friday, BMO Capital Markets adjusted its stock price target for Costco Wholesale (NASDAQ:COST), increasing it to $1,175 from the previous $1,075, while reiterating an Outperform rating for the company's stock. The revision comes as the retail giant, now valued at $440.7 billion, approaches its 52-week high of $1,007.80, having delivered an impressive 50.6% return year-to-date.
The company's consistent performance features 10% year-over-year growth in earnings per share (EPS), stable core profit margins, and robust comparable store sales.InvestingPro analysis reveals 17+ additional insights about Costco's performance metrics and growth trajectory, available in the comprehensive Pro Research Report.
Costco's recent financial results showcased approximately 7-8% growth in underlying comparable store sales, with revenue growing at 5.02% over the last twelve months to $254.45 billion. This growth, coupled with mid-single-digit percentage increases in customer traffic and strong membership renewal rates, has earned the company a "GREAT" financial health score from InvestingPro. These indicators underscore the company's effective business strategy and execution.
The investment firm's positive outlook on Costco is grounded in the company's potential for sustained expansion and sales growth. This is attributed to Costco's strategic focus on delivering value and quality, which sets it apart in the retail sector.
The revised price target reflects a shift to a more optimistic valuation scenario, applying a 60 times multiple that BMO Capital views as still reasonable for Costco's stock, though InvestingPro data indicates the stock is trading above its calculated Fair Value with a current P/E ratio of 59.65.
Costco's disciplined approach to its business model continues to drive its success in a competitive retail landscape. The company's ability to maintain stable margins while growing its customer base and sales is a testament to its operational efficiency and appeal to consumers.
The updated price target of $1,175 suggests that BMO Capital foresees further upside for Costco's shares. The firm's analysis indicates confidence in the retailer's ability to maintain its growth trajectory and deliver value to shareholders.
In other recent news, Costco Wholesale has been the focus of several financial analysts. Bernstein SocGen Group raised the price target for Costco to $1,132, reiterating an Outperform rating, following the company's first-quarter results for fiscal year 2025 which aligned with market expectations.
Evercore ISI also raised its price target for Costco to $1,030, maintaining an Outperform rating on the shares, and pointing out the company's ability to grow its membership base and top-line revenue. Truist Securities increased its price target for Costco to $935, maintaining a hold rating, following the company's robust sales trends and improved margins.
Morgan Stanley (NYSE:MS) raised its price target for Costco to $1,150, maintaining an Overweight rating, citing Costco's accelerating earnings momentum and potential for earnings growth. Deutsche Bank (ETR:DBKGn) increased its target for Costco to $1,096, expressing confidence in the company's ability to maintain revenue growth and expand margins.
These recent developments reflect the ongoing financial analysis of Costco Wholesale. The company's strong financial position is evidenced by its 21-year track record of consistent dividend payments and robust revenue growth.
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